Australia Retail Sector: Investment Research Report & Finance Analysis

This investment research report provides an in-depth analysis of the retail sector in Australia, covering aspects such as customer buying behavior, categorization of retail shopping centers, and the sector's contribution to the Australian economy. It reviews literature on various facets of the retail industry, including the impact of disposable income, consumer sentiment, and technological advancements. The report highlights the competitive landscape, influenced by online retailers and international companies, and discusses key market trends like changing consumer spending patterns and the influx of foreign companies. It also presents data on retail sales growth, consumer spending, and classifications of retail centers, while addressing challenges such as falling housing prices and weak consumer confidence. The report concludes by offering insights into the future of the Australian retail market and strategies for growth by 2020, emphasizing the importance of adapting to disruptive forces and evolving consumer preferences.

Running head: RESEARCH REPORT ON RETAIL SECTOR OF AUSTRALIA
Research report on retail sector of Australia
Name of the Student
Name of the University
Author Note

1Introduction:
RESEARCH REPORT ON RETAIL SECTOR OF AUSTRALIA
Executive summary:
The report is prepared for conducting research on the retail sector of Australia. For the
purpose of analysis, reviewing of literature relating to several aspects of retail sector has been
demonstrated. The market trend determining the future performance of the sector has been
presented. In addition to this, the analysis and arguments is supported by the presentation of
the data on sales growth, spending by consumer and classification of retail centers.

2Introduction:
RESEARCH REPORT ON RETAIL SECTOR OF AUSTRALIA
Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
Literature review:.......................................................................................................................3
Competitive Landscape..............................................................................................................7
Conclusion:................................................................................................................................7
Reference list:.............................................................................................................................8

3Introduction:
RESEARCH REPORT ON RETAIL SECTOR OF AUSTRALIA
Introduction:
The research report on the retail sector of Australia should begin with some of the
basic information of the sector that would provide an overview of the dynamics of industry.
For the purpose of analysis and preparing an investment research report on the retail sector,
the paper takes into account different aspects of the sector such as description of the customer
buying behavior. The different categories of the major retail shopping centers in the country
is defined by the property council of Australia which include major regional centre, sub
regional centre, super regional centre, city centers, bulky goods and neighbor centre.
Discussion:
Literature review:
Retail industry of Australia is regarded as the significant contributor to the growth of
economy of the country. Retail shopping centers in the country are categorized by the tenant
mix and size with most of the centers sub either regional or regional along with super
regional and major regional center. Profits generated by the retail sector varies and compared
to smaller business, the larger retail sector businesses are generally more profitable and they
appear to enjoy a better return on the cost of capital (Mordorintelligence.com 2019).
The consumer good and retailing division has faced extensive retail scenarios during
the last five years. The presence of weak growth of disposable income and volatile sentiment
of the consumers due to the unstable financial condition has led to poor trading scenarios as
the households has scaled their expenses over the goods that are non-essential. Furthermore,
development of the technologies have led to the decline in the demand with respect to retail
for various consumer goods over a time period, like video games, photographic equipment,
stationary goods, newspapers etc. The operators functioning in the subdivision have been

4Introduction:
RESEARCH REPORT ON RETAIL SECTOR OF AUSTRALIA
looking to increase the level of competition from the online retailers as the consumers have
become very much comfortable by making purchases online over the last five years.
In the current time, the retail sector is facing some of the factors due to falling
housing prices, weak confidence of customers and prevailing competition from overseas and
online competitors. The sustenance of retail sector in Australia is notices at a reasonable rate
of growth of sales in an unconventional way (Pc.gov.au 2019). There is an increased
spending on part of customer because of massive windfall for one set of customers and strong
growth of price of assets.
The level of productivity in the retail sector of Australia is comparatively lower
compared to retail sector of other countries such as North America and Europe. However,
over the past two decades, the productivity growth rate is similar to the rate of average rate
for all the industries in Australia. The productivity growth has been achieved by retailer
because of increasing capital intensity of their operations associated with adoption of
communication and information technology. Nevertheless, the opportunities created by such
technology are yet to be fully realized by most of the retailers operating in Australia.
The retail sales moving annual turnover in the country has grown by a rate of 2.8%
and the growth rate is limited by economic growth and sub trend income. There is an
acceleration in the food growth or non-discretionary during the period of intense competition
between the supermarkets (Mordorintelligence.com 2019). The graph presented below
depicts that the growth of retail sales in the country is experiencing a downward trend.

5Introduction:
RESEARCH REPORT ON RETAIL SECTOR OF AUSTRALIA
National retail sales growth:
(Source: F.datasrvr.com 2019)
The trend of growth of sales has been similar to the economic growth with stronger
sales growth rate experienced by the service-based state. On other hand, over the past ten
years, the boom in the rate of sales growth in the resource-based state has outperformed the
sales in the service-based state. In September 2018, retail sales of Australia grew at 3.7% year
on year and the sector is segmented based on the category of products, dynamics of market
and distribution channel (Deloitte.com 2019). Despite of significant lower increase in the
rising household debt and wages, the retail sector of Australia has witnessed growth. The
spending pattern of consumer has been impacted by the increase in household credit and
lower rate of interest.
According to the reports of “Deloitte Access Economics”, the actual retail turnover is
anticipated to fall from 2.2% in the year 2018 to a more diffident 1.6% development in the
year 2019 and thereafter increasing to 2.2% growth in the year 2020. The wish of the
households to undertake savings for spending will be under the pressure as the market of
housing moderates. More of the pain of the retail will be understood in the year 2019, with a

6Introduction:
RESEARCH REPORT ON RETAIL SECTOR OF AUSTRALIA
better outlook for the year 2020 as the growth of income becomes stronger and the housing
sector stabilizes (Deloitte.com 2019).
Some of the key market trends of the retail market are:
 There are some of the disruptive forces on which the future of Australian retail market
sector is dependant and such factors include foreign companies influx focusing on
formulation of new approaches to retailing and changing pattern of spending by
consumer.
 The retail landscape is being changed by rising influx of foreign companies along
with the preferences of customers. Due to advancement in technology, there is
significant shift in the preferences of customers.
 The non-responsive retailer sin the country can be identified by the multiplicity of
delivery platform and agility.
 A growth rate of 3%, 5% and 2.6% is registered in Victoria, New South Wales and
South Australia respectively.
 The economic growth of Australia has been significantly driven by the investments
that are made privately in the housing and mining markets, which has a core inflation
at 1.75%, which is particularly lower that the target constructed by the Reserve Bank.
There has been significant amount growth that has been registered by the footwear
and apparel market in Australia. The Australian footwear and apparel market has been valued
at USD 20 million in the year 2018 and it has been anticipated that it would register a CAGR
of 3% per annum.
The girl and women segment in this market has witnessed the most amount of growth,
which has been driven by the athleisure pattern. It is due to this trend, a huge number of
consumers are looking for active wear apparels in the category of non-sports. The trend of

7Introduction:
RESEARCH REPORT ON RETAIL SECTOR OF AUSTRALIA
athleisure, especially, which is prevalent in the category of womenswear, is taking the
demand for various categories, which constitutes of sports footwear and leggings. The
process of internet retailing has developed to an extensive channel within the retailers of
footwear and apparel. In the year 2017, this channel has seen a rise in its share values among
the footwear and apparel categories. This has been primarily been forced by the increased
amount of mobile penetration in Australia and with a huge amount of shift towards the
channel of online distribution.
Competitive Landscape
This report has been helpful in providing a summary of the key international players
which are operational in the retail sector of Australia. In the current time period, there are key
players who are dominating the sector in accordance to the share of revenue. However, it has
been noticed that minor organizations comprising of the mid-size and small organizations are
concentrating on enhancing their presence by making sure that new agreements and entering
in the new markets.
Conclusion:
Hence, the report has been able to provide an extensive insight into the retail sector of
Australia. The report has provided the trend of the market for the past and the coming years
to come and along with that this provided an idea about how the retail industries will
construct their plans. This report has therefore stated the actual condition of the market and
what actions can be taken with the help of which the retail sector can develop within the year
2020.

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RESEARCH REPORT ON RETAIL SECTOR OF AUSTRALIA
Reference list:
Deloitte . (2019). Retail Forecasts March 2019: 2019 - Retail's gap year | Deloitte Australia |
Deloitte Access Economics. [online] Available at:
https://www2.deloitte.com/au/en/pages/media-releases/articles/retail-forecasts.html
[Accessed 28 Mar. 2019].
F.datasrvr.com. (2019). [online] Available at:
https://f.datasrvr.com/fr1/418/76349/CW_Australia_Investment_2018_Report.pdf [Accessed
28 Mar. 2019].
Mordorintelligence.com. (2019). Australia retail sector - Growth, Trends and Forecast (2019
- 2024). [online] Available at: https://www.mordorintelligence.com/industry-reports/retail-
industry-in-australia [Accessed 28 Mar. 2019].
Pc.gov.au. (2019). [online] Available at: https://www.pc.gov.au/inquiries/completed/retail-
industry/report/retail-industry.pdf [Accessed 28 Mar. 2019].